Advocacy Update: Senate Confirms Scott Turner as HUD Secretary, Doug Collins as VA Secretary
Senate Confirms Scott Turner as HUD Secretary, Doug Collins as VA Secretary
Last week, the full Senate voted to confirm Scott Turner as Secretary of the Department of Housing and Urban Development (HUD) and Doug Collins as Secretary of the Department of Veterans Affairs (VA). MBA’s President and CEO Bob Broeksmit, CMB, congratulated Secretary Turner in a press statement.
Why it matters: Secretary Turner has said he plans an expansive review of HUD to look for ways to eliminate inefficiencies and to streamline its single-family and multifamily lending programs. He also plans on exploring options for building on federal lands, easing regulations to help lower housing costs, utilizing Opportunity Zones and other tax incentives for affordable housing, prioritizing economic revitalization and financing of commercial real estate, and encouraging state and local governments to do what they can to lower housing costs.
Go deeper: Per press accounts earlier this week, Secretary Turner is likely to play a role in working with the Treasury Department, the Federal Housing Finance Agency (FHFA), and the Congress on any plan to release Fannie Mae and Freddie Mac (the GSEs) from conservatorship.
Treasury Secretary Scott Bessent also weighed in on GSE reform this week, noting in an interview that GSE reform is behind tax matters in priority and that “the most important metric [for Fannie/Freddie release] … is any study or hint that mortgage rates would go up. Anything done around a safe and sound release is going to hinge on the effect on long term mortgage rates.” Bessent’s remarks align with MBA’s views on the need to avoid market disruption in the path toward release.
Secretary Collins and his team will be tasked with overseeing and making improvements to VA Home Loan Program origination and servicing policies.
What’s next: MBA will continue to work with leadership and staff at HUD and the VA on policies and initiatives that improve housing supply and affordability and the agencies’ lending and loss mitigation programs. MBA will remain engaged with policymakers on the importance of a careful and deliberate release of the GSEs from conservatorship that involves key reforms such as a federal backstop on GSE mortgage-backed securities and a mandate that FHFA require the GSEs to maintain a level playing field for all sellers and servicers.
For more information, please contact George Rogers at (202) 557-2797, Ethan Saxon at (202) 557-2913 or Sasha Hewlett at (202) 557-2805.
CFPB Currently Frozen
On Jan. 31, President Donald Trump put Treasury Secretary Scott Bessent in charge of the Consumer Financial Protection Bureau (CFPB) by designating him as the Acting Director. The move came shortly after the removal of former Director Rohit Chopra.
Shortly after being appointed, Secretary Bessent ordered the CFPB to pause all rulemaking, communications, litigation, and other activities. At the time, CFPB staff were also ordered to suspend the effective date of any final rules that have not yet gone into effect. Over the weekend, President Trump’s newly installed Consumer Financial Protection Bureau chief Russell Vought, appointed after Bessent, issued a notice to staff instructing the cease all supervision and enforcement activity.
Why it matters: In addition, rules or guidance issued under Chopra’s regime could be modified or rolled back and enforcement actions dropped. Changes to rules will require the regulatory process with proposed rulemakings, but guidance and advisory opinions can be removed or altered quickly.
What’s next: MBA will continue to work with leadership at the CFPB on issues that impact housing finance and regulatory enforcement actions.
For more information, please contact Justin Wiseman (202) 557-2854.
MBA, Trades Respond to CFPB Proposed FCRA Data Broker Rule
Last Monday, MBA joined a broad-based industry letter in response to the recent CFPB proposed rule amending Regulation V – which implements the Fair Credit Reporting Act (FCRA) – asking the CFPB to withdraw the proposal.
The proposed rule would significantly expand the definition of consumer reporting agency to – as a matter of practice – include most data brokers and arguably mortgage lenders in some cases. The proposed rule would also expand the definition of consumer report to include credit header data and place new restrictions on the permissible purposes for using a consumer report. MBA’s summary of the proposed rule is available here.
Go deeper: In the letter, the industry groups emphasized that the proposed rule conflicts with the statutory language of FCRA and exceeds the statutory framework created by Congress, does not create exceptions for beneficial use cases such as combatting identity fraud, and does not provide a sufficient cost-benefit analysis.
What’s next: MBA plans to send an additional response focusing on the mortgage-specific issues of the rule.
For more information or to participate in MBA’s response, please contact Gabe Acosta at (202) 557-2811.
Community Banking and Mortgage Lending Under Scrutiny in House Financial Services Hearing
On Wednesday, the House Financial Services Committee (HFSC) held a hearing titled, “Make Community Banking Great Again,” which examined community banks’ regulatory challenges and discussed potential legislative solutions. Lawmakers debated proposals aimed at easing regulatory burdens, promoting new bank formation, and reforming the CFPB. A summary of the hearing can be found here.
Why it matters:
• Lawmakers called for reducing compliance costs for community banks, including raising Bank Secrecy Act/Anti-Money Laundering (BSA/AML) reporting thresholds and adjusting CFPB rules affecting smaller lenders.
• Concerns were raised about regulatory barriers limiting community banks’ participation in housing finance, especially multifamily lending. Proposals included easing GSE program access and adjusting regulatory thresholds to expand mortgage credit.
• The CFPB’s Section 1071 rule faced criticism for its potential to raise compliance costs and restrict credit. The 1071 Repeal to Protect Small Business Lending Act was introduced as a countermeasure by Rep. Roger Williams (R-TX) (see more in previous blurb).
• Regulatory uncertainty in commercial real estate was highlighted by Democrats as a challenge for community banks, with direct implications for mortgage lending and housing market stability.
• Despite partisan divides, there was bipartisan agreement on addressing financial fraud and streamlining BSA/AML compliance.
Go deeper: MBA continues to support policies that ensure its community bank members can provide critical mortgage credit – while maintaining strong consumer protections.
What’s next: MBA will remain engaged with HFSC members to advocate for balanced regulatory measures that support community banks and their multifamily lending capacities.
For more information, please contact Bill Killmer at (202) 557-2936, or Madisyn Rhone at (202) 557- 2741.
MBA Leads Strong Industry Response to Trust Licensing Issues in Maryland
On Friday, the MBA-led coalition of industry trade groups – which includes the Maryland Mortgage Bankers and Brokers Association (MMBBA) – planned to submit a comment letter to the Maryland Office of Financial Regulation (OFR) to respond to OFR’s guidance and emergency regulations to facilitate compliance with the state Appellate Court’s April 2024 ruling in the case of the Estate of Brown v. Ward.
• The guidance and regulations have raised urgent issues for entities involved in the secondary mortgage market because OFR’s interpretation significantly (and unnecessarily) expanded on the Court’s opinion.
• The letter will strongly encourage OFR to rescind its regulations, and the legislation – sponsored by key Committee leaders in both chambers – would create the necessary exemptions for trusts to the Installment Loan Licensing Law and Mortgage Lender Law. The bill would also create a one-year study commission to review the issue and make recommendations to the Legislature.
Go deeper: The case in focus was limited to an assignee of a home equity line of credit and whether the assignee needed a license to have the legal authority to bring a foreclosure action. The Court agreed that a license was required, but the OFR unnecessarily expanded the regulation to cover purchasers/assignees of closed-end credit such as passive trusts of residential mortgages loans, which under the order would also need to be licensed. The requirement was effective January 10th, but OFR has delayed enforcement until April 10th.
Why it matters: MBA and MMBA last fall strongly urged the OFR not to expand its rules beyond the court’s decision and warned of the harmful and immediate consequences to the Maryland mortgage market and consumers. In recent weeks, the industry’s predictions of detrimental impact to Maryland borrowers have proven prescient as several purchasers of Maryland loans have announced that they will either raise costs for them or cease their purchases.
What’s next: MBA and MMBBA will continue to work with its coalition partners in supporting the legislation and encouraging its passage in both chambers and speedy enactment.
For more information, please contact William Kooper at (202) 557-2737 and Justin Wiseman (202) 557-2854.
Federal Reserve Releases 2025 Bank Stress Test Scenarios
On Wednesday, the Federal Reserve Board released the hypothetical scenarios for its annual stress test, which analyzes large banks’ ability to lend to households and businesses even in a severe recession. The annual stress test evaluates the resilience of large banks by estimating losses, net revenue, and capital levels under scenarios that extend two years into the future.
• Twenty-two banks this year will be tested against a severe global recession with heightened stress in both commercial and residential real estate markets, as well as in corporate debt markets.
• The Fed also reiterated that it will soon take steps to reduce the volatility of stress test results and begin to improve model transparency in the 2025 stress test. A public comment process on its comprehensive changes is expected later this year.
Go deeper: The Fed also released two hypothetical elements designed to probe different risks through its “exploratory analysis” of the banking system. One of the hypothetical elements will examine banks’ reaction to credit and liquidity shocks in the non-bank financial institution sector during a severe global recession. The second hypothetical includes a market shock that hypothesizes the failure of five large hedge funds with reduced global economic activity and higher inflation.
Why it matters: While the Federal Reserve indicated that the exploratory analysis will not affect bank capital requirements, there is some concern that the results could be leveraged in a way that enables Fed supervisors to pressure big banks to keep capital even higher than current requirements. MBA will monitor the results – and any developments – that derive from the “not binding” hypothetical elements.
What’s next: MBA appreciates the Federal Reserve’s plans to increase transparency and reduce volatility in stress test results and looks forward to the reviewing and participating in the next steps on this effort.
For more information, please contact Fran Mordi at (202) 557-2860 or Pete Mills at (202) 557-2878.
New York Publishes Proposed IMB CRA Rules in State Register
On Tuesday, the New York Department of Financial Services (DFS) officially published in the New York State Register its proposed rules to implement the New York Community Reinvestment Act (CRA) for independent mortgage banks (IMBs), which was enacted in 2021. This release follows a mere ten-day comment period during December when DFS previewed its proposed rules outside the official state regulatory process. Despite this compressed timeline, MBA, the New York MBA, and aligned local groups responded.
• Among other points, MBA implored DFS to not base the IMB regulations on existing CRA NY exams for depositories and instead align as much as possible with the Massachusetts CRA framework (the only state with functioning CRA process for IMBs).
• MBA further stressed that IMBs have different business models, do not have deposits to “reinvest,” do not have access to direct government support, already lead the market in sustainable lending in low- to moderate-income (LMI) communities, and are subject to robust oversight and supervision in every state in which they operate, as well as from the federal regulators.
Go deeper: While the text of the regulatory language is unchanged from the previous version, the State Register language that accompanies this release offers some encouragement that MBA’s messages have resonated.
• For example, regarding examination costs DFS notes that “mortgage bankers regulated by DFS are already assessed for DFS’ costs of examinations. DFS does not expect that CRA examination will significantly change the assessments on mortgage bankers.”
The language also discusses IMBs’ unique business model in noting that “because mortgage bankers do not take deposits, mortgage bankers will not be evaluated on investment activities. Instead, mortgage bankers will be assessed based on their activities in communities where they do a substantial portion of their lending business.”
• The proposed regulation includes several methods for setting an assessment area, developed to account for the most common mortgage banker business models, both branch-based and lending-based. The text speaks to conforming with other states’ IMB policies where it notes “DFS also reviewed CRA requirements applied to mortgage bankers in other states to refine the proposed regulation.”
Lastly, as MBA recommended, the Department will rely on existing reporting, including the Home Mortgage Disclosure Act (HMDA), and noted that “DFS expects reporting paperwork pursuant to proposed § 120.2 to be minimal as compliance will primarily require submission of data already collected and maintained by mortgage bankers.”
What’s next: MBA, the NYMBA, and their local New York association partners will do a thorough review of the rule and develop a written response during the 60-day comment period.
For more information, please visit MBA’s State CRA resource center or contact William Kooper at (202) 557-2737 or Liz Facemire at (202) 557-2870.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:
• Recent Trends in Fair Lending and What to Expect with the Administration Change – Feb. 12
• Mastering Compliance and Efficiency with Digital Reverifications – March 4
• AI Voice Agents and Use Cases for Mortgage Lending – April 10
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin at (202) 557-2931.
